Proforma invoices: what they are for and when to use one

A quotation is an offer: here is what the work would cost, and you are free to decline. A proforma invoice comes after agreement and asks for payment ahead of delivery. A tax invoice records a completed sale and is the document your client's accounts department files.

The practical difference is timing and finality. A proforma can be revised, and it should not be treated as a booked sale in your accounts. The tax invoice that follows is what gets recorded.

Use one when a deposit is required before you begin, when a new client has no payment history with you, or when your client's finance team needs a document to raise a payment before receiving goods.

It is also the document customs brokers and freight forwarders usually ask for on cross-border shipments, because it declares the value and terms before anything moves.

Label it clearly as a proforma invoice, give it its own number, and include your details, the client's details, itemised goods or services, totals, the validity period and the payment instructions. Note that it is not a tax invoice so nobody files it as one.

If a deposit is being requested, spell out the split: what is due now, what is due on delivery, and what happens if the order changes.

Proforma invoice is a first-class document type, not a renamed invoice. It gets its own numbering series and prints with the correct heading, alongside quotations and tax invoices.

Payment instructions work the same way as on any other document: bank transfer fields, a crypto wallet with its network, cash details, or a combination shown together.